Ask HTM - Car Repair Ripoffs, Roth Contribution Limit Confusion, and House Hacking Litigation Mitigation #865

Let’s dive into the week with some fresh listener questions we have lined up for you! And don't just stand on the sidelines- if you have a question you’d like us to answer, toss your voice memo our way. It only takes about 90 seconds to record and you can find a step by step guide over at HowToMoney.com/ask . Regardless of how random or bizarre you might think it is, we want to hear it!

 

1 - Is my car mechanic ripping me off? If not, then what’s the best way to manage those expenses?

2 - How much should we set aside for retirement if we’re going to receive a pension?

3 - Is my work sponsored retirement account which happens to be a Roth, inclusive of the overall Roth contribution limits?

4 - Can I take advantage of the Mrs. Murphy exemption in order to steer clear of any potential litigation against me as a landlord?

 

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• Massively reduce your cell phone bill each month by switching to a discount provider like Mint Mobile.

 

During this episode we enjoyed a Champion Ground by Jackie O's! And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!

 

Best friends out!

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Episode Transcript

Speaker 1 (00:00):
Welcome to How to Money. I'm Joel and I am Matt.
Today we're going to answer some of your listener questions.

Speaker 2 (00:24):
You know what, buddy, And by the ways, there might
be some newer listeners out there who are thinking, how
do I get my voice memo played on the How
to Money podcast?

Speaker 1 (00:32):
All you gotta do is record.

Speaker 2 (00:33):
That thing on your phone and email it to us
at how to Money pod at gmail dot com.

Speaker 1 (00:38):
Send Matt one hundred bucks via Venmo. It does help
to question a little bit. Now, I'm just kidding. And if,
by the way, whatever question you have, send it over.
Like if it's a question you've been batting around in
your brain, chances or somebody else has that question, you
might think, Yep, this is a stupid question. Nobody else
is thinking the same thing. But that's just not true.
You would be wrong.

Speaker 2 (00:57):
And plus it just add so much color. We love
hearing where everybody's from, what they've got going on in
their life. It adds a lot of detail and color
to the different financial topics that we talk about day
in and day out. But we're gonna hear from a
listener who is looking to manage some of his car
at maintenance costs how to do that most effectively. Another
listener is looking for some clarity on her WROTH and
her traditional IRA accounts. Specifically, she's asking about contributional limits.

(01:22):
And we've got someone else who's looking to mitigate some
risk when it comes to house hacking. We'll get to
that as well as additional personal finance topics during our
episode today.

Speaker 1 (01:31):
Buddy most deeph All right, well, let's start off looking
forward to it. One interesting personal finance topic that I
wanted to cover, Matt after seeing it in the hod
of Money Facebook group. Listener Devin made a post and
you and I we haven't done a frugal achievement a while,
and so I was like, oh, this is a good
frugal chief, Matt, and I should bat this one around,
he asked. And if you're not a if you haven't
signed up for the how of Money Facebook group, please

(01:52):
go join if you're on Facebook, because it's occasionally there's
silly things like this in there, but most of the
time it's people helping each other out. And this was
an hon question I think from Devon truly saying should
I save money in this way? And tell you what
he asked you, I call this serious as well.

Speaker 2 (02:06):
Yeah, you should say sometimes the questions are more technical,
whereas this one is.

Speaker 1 (02:10):
It's a little more lifestyle based. That's right, that's right.
So his question was essentially, winshow wipers taking them off
my car? Is that frugal or cheap? And he was
basically saying, what if I take them off when I
know it's not gonna rain, Because even just the sun
beating down on them is wearing at these windshield wipers,
And so guess what if I leave them in the
garage or maybe maybe even in the house and heated

(02:30):
and cooled, Matthews, windshield wipers are gonna last a whole
lot longer. I don't know what's your take on Devon's fruguler.

Speaker 2 (02:36):
Cheap question, So I think, okay, I'm pretty sure that
you're gonna I know which direction you're gonna go in,
and so I'm gonna start start out by saying that
I think the knee jerk reaction is that this is
I think most people hear in this are like, man,
that is so cheap.

Speaker 1 (02:48):
Basically everybody in the Facebook group said please don't do that.

Speaker 2 (02:51):
But I think the reason that a lot of folks
would say that is because this is just an unorthodox
way to save money. And you know what, Joel, we
don't discriminate. We do not hate when it comes to
how does that people spend their money. That is the
craft beer equivalent. We always ask our guests, hey, what's
one way that is a total waste of money in fact,
but for you, you find a whole lot of joy
in spending your money this way. And so by that

(03:12):
same token, I feel I can't go down the path
of hating on someone's practice of how it is that
they save money because for that person it just might
be I don't know, it's just one thing, and for
different unique individuals out there, they might really enjoy how
it is that they're able to save a buck. What
I'm saying, I totally know what you're saying, Yeah, and
I agree. I think for a minute there, maybe I've
talked to Smack about plasma donation and I feel bad

(03:34):
about that now because we have listeners who do that.
They make extra money donating plasma, and I did it
in college, and so it was just like, I think
I've gotten past a point where I'm willing to do that.
That doesn't mean that other people can't do it successful.

Speaker 1 (03:45):
If not talk trash about donating plasma on the show.
I feel like I did. I don't know, maybe like
a year ago or something really and then we had
a listener.

Speaker 2 (03:51):
We had a listener even write in or maybe maybe
it was an email, and that's how he would pay
for vacations. Yeah, it's specifically like trips to Disney. They
travel a ton and for him, it's how he's sort
of mentally accounted for it.

Speaker 1 (04:02):
He siloed the money that he makes via donating plasma
and that's awesome vacation. And I think, but I think
I cheapened that a little bit because I was just like, ah,
I wouldn't do that. Different strikes for different folks, but
these different structure for different folks. I guess this one
makes me worried about the listeners safety at time. Like
let's say there is some sort of pop up thunderstorm.
We live in Atlanta. Those happen all the time. What
if you accidentally pop on your Wins show wipers and

(04:23):
they're not there, you have to sit, You're wasting time.
I guess the savings are so potentially small. I just
don't know that it makes sense to focus on this
one to take the wind show wipers on and off,
like depending on how whether checking your phone and stuff
like that. What's so what they're going to be like
today tomorrow? And I get the downside possibilities for forgetting
your win show wipers are far more severe than the

(04:44):
potential cost savings that you're gonna accrue.

Speaker 2 (04:46):
Yeah, you can always keep him in your car that way.
If it does start to rain, you just hop out
pop them on real quick.

Speaker 1 (04:50):
That's true. You know you can do it that way.

Speaker 2 (04:52):
But I agree with you ultimately though, Like practically speaking,
I just know that. So I recently changed out the
wipers on our van. By the way, do they always
sell them at Costco? I think the micheline ones where
they don't squeak at all, and which is something that
our kids have been complaining.

Speaker 1 (05:06):
About like for years. I actually I think they.

Speaker 2 (05:09):
Rode in y'all's van and they're like, oh, it's so quiet.
And that's when I realized, Oh, I just need to
get the non cheap whin Scholl wipers that.

Speaker 1 (05:16):
They sell at Costco. And honestly, when they're on sale,
they're cheap. They're eight bucks a blade.

Speaker 2 (05:19):
Yes, literally, I bought two of them for sixteen bucks. Yeah,
but so I recently changed them out. And what happened, though,
is when you're popping off the old ones, a lot
of times what happens is the little plastic tab that
holds them on breaks. And so this could be an
instance where Devin ends up actually paying more money because
of the fact that maybe he's getting ready to pop
off a perfectly brand new pair of wipers that he

(05:41):
had on during last week is a rainy week, and
he's going to wanting to preserve him and he ends
up breaking a tab. He's up the creek without a paddle.
Then he's got to go maybe buy a whole other set. Yeah,
And then okay, so here's another So.

Speaker 1 (05:52):
We've talked about.

Speaker 2 (05:53):
We dedicated an entire episode to are you being frugal
or are you being cheap? And one of the things,
like one of the criteria that we encourage folks to
think through was are you being too near sighted? Are
you only looking at the short term as opposed to
the long term. And so I was picturing myself in
the situation and I'm like, Okay, I'm driving around my
Winchel wiper arms are up there and they're sitting there
against the glass, and then I pictured that.

Speaker 1 (06:14):
I was like, oh, I don't like that.

Speaker 2 (06:15):
I don't like the idea of the arms sitting there
against the glass. And then I thought, what if my
knee bumps the winchell wiper arm and then that metal
just scratches across the glass of the of the windshield.
And he's worried about having streaks on his windshield from
there being gaps in the rubber because it's not able
to wipe properly. How about permanent scratches on the windshield,

(06:36):
Because here's the thing. You're not going to replace your
windshield just because it's got some scratches on it. Somebody
like this is going to say, now I just have
to suffer through it. But that's an instance where you're
trying to pinch some pennies here and there, when ultimately
it's going to potentially cause you much more money or
hardly down the road as well.

Speaker 1 (06:55):
Might say some pennies cost you dollars down the line. Yeah,
you don't hit it perfectly in the way you take
them on and all exactly. And I think it's just
going to add a little.

Speaker 2 (07:03):
Hassle into your life for very little savings. So you're
super tall. I know you bump the winchell wiper arm
all the time. I know you're like just climbing in
for me now your vehicle. It's true. Yeah, So I'm
just gonna say, and you know, not again, not in
a hating way, but this was cheap in my estimation.

Speaker 1 (07:19):
Ultimately, I agree.

Speaker 2 (07:20):
I love the creativity in some of the different ways
that folks want to get out there to try to
save some money, But in this way, practically speaking, I
think it's just not going to pan outgain.

Speaker 1 (07:28):
Maybe too far. All right, Matt, let's mention the beer
we're having on this episode. This one is called Champion Ground.
It's abourbon barrel aged out with coffee in it from
the good folks over at Jackie. O's really looking forward
to having this one. We'll give our thoughts at the
end of the episode. But yeah, if you have a
money question for us, please do submit it. The instructions
can be found at how money dot com slash ask mount.
Let's get to the first question for this episode. This

(07:50):
one is about car maintenance and how to budget appropriately.

Speaker 3 (07:55):
Hey guys, this is Rory from Highlands Ranch, Colorado. Thank
you so much for everything you do and for sharing
your knowledge and expertise so widely via the podcast. That's
super appreciated. My question today is on navigating carbon maintenance costs.
I'll just raise my hand and say, I'm not that
knowledgeable about cars, and I'm not very handy. I'm certainly

(08:17):
not a mechanic. So when I go into the shop
to get oil changes performed, oftentimes the technician will recommend,
you know, various sort of maintenance services that be done,
like break fluid flushes, and a recent one was a
rear differential fluid flush. I struggle a little bit because

(08:37):
these these kind of everyday maintenance upkeep items are so expensive.
So for example, for that break fluid flush, it cost
one hundred and fifty dollars, one hundred and twenty five
dollars of which was which was labor. And I got
to imagine that this is a pretty straightforward procedure, so
it just seems so expensive. So I'm wondering if you've

(08:58):
got any tips or advice on how to navigate these
types of costs so that you're not spending you know,
an arm and a leg on them, especially when you're
just not that handy and not very well equipped to
do them yourself. Thanks a lot of guys, Bye Joe.

Speaker 2 (09:13):
I like how Rory said that he is gonna go
ahead and raise his hand and admit that he's not
super handy.

Speaker 1 (09:18):
I can just picture like a group.

Speaker 2 (09:19):
It's like, oh no, don't pick me, I can't change
mo oil. It's being honest with your talents and the capabilities.

Speaker 1 (09:26):
That you have. I too, will raise my hand alongside Rory.
I have friends who are great at car maintenance, and
I'll you know, pick their brain, ask them questions. Sometimes
Hey I'm hearing the sound, Hey this thing is going
on with the car, and they've always got great advice
or they're like, just take it to your mechanic. And
that's what I end up doing because I can do
the most incredibly basic stuff like change my winshow wiper blades.
That's fairly That's about as far as it goes from me, though,

(09:48):
And so we say, like, first, first things, first, verify
whatever quote you're getting Rory. You know, one way to
do that is to utilize a tool that Kelly Bluebook offers,
which is going to help you estimate what to repair
for your given making. My should cost. So Matt I
looked up what the service that he was talking about
would cost on our twenty thirteen Odyssey, and one hundred
and fifty bucks seems like a great deal based on

(10:09):
kind of the numbers that it spit back out for
a break flush. Yeah, exactly. I think it was supposed
to be between one hundred and seventy three and two
hundred and twenty three bucks something like that. So one
hundred and fifty bucks, it's like, oh, that's actually not
that bad. But the tool is really, I think, a
godsend when you're trying to figure out if the quote
that you were given is based in reality or not.
So at least you can see what Kelly Blue Book

(10:30):
says you're likely to pay to either an independent mechanic
or a dealer. They kind of break it up like
that so you can know, Okay, cool, Wait a second
to see it totally seems like this is not competitive
with what other mechanics are likely to charge me for
the same service. I need to check around, call a
couple of other mechanic shops and get quotes, or wait
a second, it looks like gonna get a decent deal here,

(10:52):
or it's at least within the normal price range. Maybe
I should just pay the piper.

Speaker 2 (10:56):
And I think that should give folks you should feel
at ease once you look something up and if you
can find a price, if you can get a quote
that's within that range, because that's the biggest thing.

Speaker 1 (11:04):
It's just not knowing.

Speaker 2 (11:05):
It's being there in the lobby at a shop and
they tell you that it's going to cost as much
and you say, I don't know, well should I do
that or or shouldn't I like, you've got no idea.
You're kind of behold and then you're stuck there and
oftentimes you probably need to get going, or you need
to make a decision, you got to go to work,
you're about to catch your uber or something like that.
You need some data to help exactly. And so this
is totally something that you can just pull up on

(11:25):
your phone. But I think that could keep folks from
just feeling taking advantage of it. I think that's what
that's what I hear Rory speaking to, is the fact
that it's like, well, how am I supposed to know?
You feel like you just feel so vulnerable there in
the moment, and especially too like.

Speaker 1 (11:38):
How so many people feel with people trying to sell
the financial products, You're like, well, you know better than me.
You're telling me I need this. I guess I should
pay the big price, whereas a you know, quick little
search could inform you quite a bit and you might realize,
wait a second, this is fee laid and not actually
terribly helpful.

Speaker 2 (11:54):
Except I would say that car maintenance is even you're
even more. It feels like you're being held hostage because
literally your car is somewhere else you or being inconvenienced,
and you are just wanting to move on with life,
so you.

Speaker 1 (12:02):
Have less time to figure out yes exactly.

Speaker 2 (12:04):
It's a combination of that, and I think it's also
a combination of feeling that like for a lot of folks,
you're not getting bigger repairs done on your vehicle like
every single year, like every year you get your old changed, right,
But it's not. It's like every few years that something
bigger comes along. And I think what that means is
that given inflation and how we've seen prices go up,
we've seen prices go up on everything, and then let's

(12:25):
say two three years go by and all of a
sudden you're told it's going to cost you this much,
looking the actual price of a procedure or not a procedure,
this is a medical this is a car repair. Looking
a fix up like that can just put you at
ease as opposed to feeling like you're just getting older
and you're like, oh, man, I remember when everything used
to be a whole lot cheaper cars didn't used to
cost us much to repair a nickel, right, exactly one

(12:46):
thing you mentioned though, so you said, trying to figure
out whether or not you should go and go see
an independent repair shop or a dealer. Well, stats show
that having work done at a dealership is going to
cost you more, and you won't just pay more money,
but you're not going to be as happy with a
quality either. This is according to data from Consumers Checkbook.
They found that a much higher percentage of folks were

(13:09):
happier with the work done at a locally owned independent shop.
The average hourly rate for labor there. It's also going
to be more affordable as well. At a dealer it
comes in at two hundred and fifty five dollars versus
one hundred and eighty two dollars an hour at an
independent mechanic. So that's important to keep in mind car stuff,
it's not cheap. But yeah, these stats back up everything

(13:30):
else that we've heard, everything that I've certainly experienced myself
over the years about independent shops. It's at least going
to be less expensive than the name brand dealership alternative
out there. And you know, just because you go to
one local shop doesn't mean you can't hit up some
others as well, where you can maybe call around see
what it is that they might charge for the same service,

(13:50):
that kind of thing.

Speaker 1 (13:50):
So I needed to get new brake pads and my
roaters turned recently Matt, and I was like, okay, cool.
The number came back hit me in the face. I
was a little surprised. I was like, wait for all
four wheels, I think it was five hundred and sixty dollars.
I was like, that sounds like a lot, And it
was the inflation thing because I hadn't done that in
a long time, and I was like, I swear I
remember that being like three hundred bucks, sure, and.

Speaker 2 (14:11):
So maybe it was two fifty. Maybe I'm remembering ry
it was like two twenty five. So I called my
friend pretty sure it was one hundred and eighty dollars
to fixes his own cars, and I didn't ask him
to do it for me, although that would have been awesome.
But I was like, does this sound normal to you?
And he's like, yeah, it does. But here, call this
place in this place because they do good work too.
So I called two other places I trusted, and I
was able to get quotes over the phone, so I
didn't have to go in there and show them the car.

(14:32):
I was like, listen, this is exactly what I'm looking
to have done to this vehicle, and they had higher quotes.

Speaker 1 (14:36):
So I took it to the place that had given
me the initial quote that I already trusted. And that
I think is a really important part of this conversation too,
is do you trust your mechanic? Do you think they're
recommending things to you that you don't actually need. If so,
that is a potential problem too, and I think it's
something that maybe people worry about. I don't know how
prevalent it is, but it's something people are like, I
don't know if you need to replace this in such hose,

(14:58):
but if you say that it needs to happen, I
guess needs to happen. And so one thing I would
recommend is to ask your mechanic to show you the issue.
Most of them will, and that can be enlightening, right.
I love laying eyes on the problem, even if I
don't fully understand how everything's working under the hood or whatever,
if you can point it out to me and show me, hey,
look at the degradation in this. You can see how
like this products or this part of the car has

(15:19):
worn out over time it needs to be replaced.

Speaker 2 (15:21):
It pushes like a finger through some poes. You're like, oh, buddy,
why don't you just leave that alone? Starts smoking and stuff,
and you're like, I guess I gotta repair it now.

Speaker 1 (15:29):
Do whatever you gotta do. But the thing is, it
is often easy for us to see, even if we
don't know exactly what's going on. Maybe fluid discoloration or
worn down break pads or a belt that's past its
prime like those are the things that even the layperson
who doesn't know anything like myself, can kind of understand
when they pointed out to you. And the best mechanics
are typically more than willing to spend a couple minutes
showing that problem to you and explaining it to you

(15:51):
to put you at ease totally.

Speaker 2 (15:53):
Yeah, I think another question to ask too is what
would happen if I don't go through with this maintenance
right now? Yeah, so recently I received a quote. It
was like for some steering arms or like tyrod arm
bushings or something. It was like the little rubber piece
or plastic piece that goes between it sounds like a
made up thing, I know exactly, but yeah, you get
super curious and say, oh, what does that mean? Like
I would love to see that A because well I

(16:14):
am curious, but B there's a little bit of accountability there.
It's just like I would love for you to help
me to understand why this is gonna cost so much.
He showed it to me. I saw the cracks, but
then ask, okay, well, if I don't do this, what
does that mean?

Speaker 1 (16:27):
Is it dangerous? Is the car going? Am I gonna
lose control and crash or something like that?

Speaker 2 (16:32):
And they're like, oh, no, you'll start to notice some clunking,
like when you turn over time it'll continue to degrade. Okay, great,
that helps me to understand that this is not like
a life or death situation.

Speaker 1 (16:42):
They might say, oh, six months, a year from now,
you should be fine to replace them. Then if you're
feeling more issues.

Speaker 2 (16:46):
Well, at least I can just yeah, keep I'm able
to monitor it myself and kind of have a pulse
as to the state of my own vehicle. And it
just helps you to feel a lot more informed. And
plus it helps you just to save up for that
purchase as well. And so Rory, I think another I
guesscommendation we'd make is just to make sure to start
budgeting for these future repairs. I'm not sure how old
your car is or how well it's been maintained, but

(17:06):
depending on the age, depending on the state of your car,
you might need a funnel more money maybe less into
that car repair fund. Consumer reports they actually have solid
stats on the likely annual repair costs based on the
age as well as the vehicle type, which which certainly helps.
And then if you overstuff it, you know, if you've
got too much cash on hand, well, that means you've
got more money on hand for.

Speaker 1 (17:27):
The purchase of your next vehicle. Matt, I've never had
too much cash on hand. I haven't either. I would
be willing to endure that problem though.

Speaker 2 (17:33):
I'll point out to you this is when having being
a money nerd and keeping up with all of your
expenses pays off. Because I was able to open my
excel file, jol and I was able to quickly just
a nice glance, see how much I spent on average
over the past decade.

Speaker 1 (17:46):
You want to guess on annually for car maintenance annually
on our van? Yeah, okay, I'm gonna say, I guess so.

Speaker 2 (17:53):
It's ten years. We haven't had our van for ten years.
So before that we had the VDUB yeah beside, okay,
So overall, I'm gonna say twelve hundred dollars. Okay, So
I came in low. Seven hundred and thirty bucks. Wow,
seven hundred and twenty nine dollars and twenty four cents.

Speaker 1 (18:05):
To the exact.

Speaker 2 (18:06):
But what that gives you the ability to do is
at the beginning of the year, when you're making your budget,
to say, all right, by the end of this year,
let's just round up. Let's say we need eight hundred
bucks in that account to handle any likely maintenance costs.
All right, sixty six bucks a month. Let's just start
plugging that into the savings bucket for card maintenance, four
different repairs that might pop up, And that way you
can It feels different too, a to know that, Okay,

(18:27):
this is a legit repair that needs to be made.
But then also, man, I've got the money set aside
to make this repair happen.

Speaker 1 (18:32):
Yeah.

Speaker 4 (18:32):
Man.

Speaker 1 (18:33):
Last thing worth mentioning here is I think some people
they when they get a repair bill or they get
a quote or something like that, they freak out and
they're like, it's time to ditch this ride and get
something new that's not gonna give me as many problems.
And I get why people think that or why people
feel that way. Is that emotional response, Oh dude, it
really does stink. It really does stink. But you when
you look at the numbers, the numbers don't lie. And

(18:54):
think about how much you pay have paid a year
in maintenance costs for that van. Some years is more,
but then some years this is. Hold on. That's the average, right, yes,
But think about what the average car payment is for
someone who buys a new car. It is right in
that ballpark, potentially even just a little bit higher than that.
I think the average monthly car payment for a new
car is like seven hundred and fifty something dollars. Other

(19:15):
other costs go up to when you buy a new car.
So while it can feel like a gut punch to
get a five to six twelve hundred dollars repair bill.
It's so much better than the continual gut punch of
a payment for sixty or seventy two months. You definitely
don't want that, so Rory. Hopefully all this is helpful. Ultimately,
what feels like a financial loss forking money over for
car repairs, think of it as a financial win. You're

(19:36):
forestalling your need to buy something newer that's going to
cost you even more.

Speaker 2 (19:41):
That's right, Joel. We've got more to get to. We're
gonna hear from a listener who has a sweet retirement benefit.
We'll get to that and more right after this.

Speaker 1 (19:56):
Our back. We got more money questions we've got to
get to on this episode. This next question comes from
a listener who's wondering how to think about his retirement
given a special perk he's been offered.

Speaker 5 (20:06):
Hi, Matt, Joel, this is Mike calling from Kansas City, Missouri.
Love the show, love all the advice that you provided
over the years, and love the theme song too. My daughter,
who's now almost six, I used to comfort her and
try and get her to bed back when she was
an infant, and I have many happy memories of the
theme song coming on as it's one or two in
the morning, and I was listening to you all as

(20:28):
I'm trying to put my daughter back to sleep. My
question today is about how to figure out how pensions
tie into retirement. I know you've had some previous guests
and questions about teacher pensions, and my questions more about
military pensions. So my spouse and I are both in
our forties. My spouse is a public health service officer

(20:50):
who's got about six more years left till she's eligible
to retire, and she's able to stay in longer if
she'd like. Once she does retire, though, she'll be retiring
with fifty percent of base pay, and probably just as important,
will also be covered from a healthcare perspective under Trycare
for Life. So as we're kind of figuring out our

(21:10):
retirement goals and strategy, how do we account for this
pension or this retirement again fifty percent of base pay
and having Trycare for Life. I don't want us to
underinvest or underplan for retirement, but I also want to
make sure that we're playing at smart so we're not
sacrificing things in the current day and maybe we're putting

(21:33):
away too much for retirement. Thanks so much and excited
to hear what recommendations you might.

Speaker 2 (21:38):
Have, Joe, should we tell Mike that that's why his
baby was up in the middle of the night was
the fact that he was listening to our podcast.

Speaker 1 (21:45):
That's also why his baby's going to go to Harvard.

Speaker 2 (21:46):
Sorry, our screeching voices were in the background giving.

Speaker 1 (21:50):
His daughter up, like stop it, stop playing the music
and they're terrible voices and I will sleep dad. Oh man, no,
it's super sweet.

Speaker 2 (21:58):
I feel like now that we've been told this, this
is the first time actually we've ever heard this, because
anytime we talk about the music, we're like, man, maybe
it's time to ditch the music, or maybe we're going
to switch it up. I feel like you, Joe would
be happy if we switch it over to like Tyler
Childers sounding like so or whatever my jam. I'd be
done with more like alt electronic or something like that.
But now I feel now that we've heard from Mike,

(22:18):
I feel like we.

Speaker 1 (22:18):
Can't really switch things up. I know, you know some people.
I feel like what we've heard most consistently is that
it sounds like the theme music from Entertainment Tonight. I
hate that, yeah, which is kind of true. People don't
even know what EAT is anymore. I don't. I don't
think so.

Speaker 2 (22:33):
That was early nineties, dude, Man, that show was We're
dating ourselves, popping back in the day, show.

Speaker 1 (22:37):
Fire, you know what they say? Yeah, all right, let's
get to the heart of Mike's questions, specifically talking about
pensions and retirement. They're dying off obviously incredibly quickly. So
this question, Matt, it's not as applicable to as many
folks it used to be, But I do think just
to maybe make it more applicable to everyone out there,
maybe use our answer to this question and think about

(23:00):
how it relates to factoring in social security to your
retirement plans. And I get the desire too to find
the sweet spot here. We will offer some advice on
that front, but I think it's also important to mention
from the outset that it's a tall order. It's hard
to predict the future, and even with the advice we
have to offer here, please Mike realize there's a margin

(23:20):
of error, right, as well as a lot of personal
details that can impact the answer. So we're trying to
achieve the same goal as you are. We want to
save and invest enough to have a non worrisome retirement
without overdoing it so much that we deprive ourselves in
the here and now. That is a good goal to have,
but also know that while you're striving for that, hitting
it perfectly that's the die with zero mantra, Matt, I

(23:42):
understand the goal to do that, Actually pulling that off
is another matter. Yep, one hundred percent.

Speaker 3 (23:46):
Man.

Speaker 2 (23:47):
Yeah, and that balance is something that we're striving for
as well, but just knowing that we're not going to
be able to necessarily nail it perfectly.

Speaker 1 (23:53):
But Mike, it's also like Simone Biles at every Olympic event, right,
whatever she fell out.

Speaker 2 (23:59):
Everything else, she's still the most She the most decorated
American gymnast of all time.

Speaker 1 (24:03):
I'm going to say that's she's the goat. She and
kater Ly Decky. What's crazy.

Speaker 2 (24:07):
We shouldn't go on the stange but like, have you
seen the chart for different gold medal winners best all
around gymnasts based on the with their age, They're in
the chart as well.

Speaker 1 (24:17):
Because she is the first, the first.

Speaker 2 (24:19):
Gymnast over the age of nineteen. Since like nineteen fifty two,
wow or something like that, all of the top gymnasts
have been like fourteen, fifteen, sixteen, like all the way
up to nineteen years old. But the likelihood of someone
being able to maintain that kind of performance I guess
into their twenties is just unheard of, which is.

Speaker 1 (24:36):
A part of why Tom Brady heurline touchdown for forty.

Speaker 2 (24:39):
She is like literally the gymnast gymnastic versions of Tom Brady.

Speaker 4 (24:42):
Wow.

Speaker 1 (24:42):
Yeah.

Speaker 2 (24:42):
So anyway, it is also pretty cool to know that
you're not going to have significant health care expenses in
retirement as well, because that is an incredible benefit that's
certainly well earned thanks to your spouse's service. That's it's
like one wild card that you're not going to have
to deal with, that pretty big one the rest of
us are going to have to deal with. You won't
thanks to try care. The other thing is that she'll

(25:03):
be getting that pension before she reaches full retirement age.
It's amazing, but it also won't be as much as
she's currently making. And so this is where focusing on
your income replacement rate is how a lot of financial
planners like to plan things out for retirement, and the
typical suggestion is to have the goal of replacing seventy

(25:24):
five percent of your income in retirement. And so the
more that coming from the pension, the less you're going to.

Speaker 1 (25:29):
Need to save up and provide yourselves.

Speaker 2 (25:31):
And part of the reason that it's you're only looking
at seventy five percent as opposed to like a full
income replacement is because your expenses are typically lower in retirement.
But also you won't be saving for your retirement anymore,
like simply.

Speaker 1 (25:45):
So you've been putting twenty percent aside, you can automatically
take that off exactly now you're at the point where
you're tapping those funds, so like, stop saving for retirement
now that you're seventy as well in taxes as well,
so typically you're going to be paying less in taxes.
You might not have a mortgage either, right, which is
gonna be another big help. So yeah, using the pension
amounts alongside the twenty five x rule of your projected
retirement nest egg, I think I should give you a

(26:06):
solid place to start. And that is of course a
rule of thumb, because this is an imperfect science. But
other questions that we would have for you. Are are
you going to have a paid off home? Right, That
is a big factor into the mix as to how
much you're going to need to save in addition to
that pension. If you're going to still have a house
payment for many, many years into retirement, that's going to

(26:26):
change the number that you need to save. When are
you planning on retirement, Right, If you both want to
retire in your early to mid fifties, you're going to
want to invest more than if you're planning on working
into your sixties or early seventies. How much you're setting
aside depends largely on answers to those bigger questions and
also how flexible you're willing to be, because you might say, Oh,
I like to retire when I'm fifty four, but honestly,

(26:49):
I like what I do, and if circumstances arise that
I have to work longer, no big deal. The more
flexible you can be, the less tightly focused you're going
to have to be on getting that number as large
as possible.

Speaker 2 (27:00):
Yeah, So as we zoom out, like when you're looking
at the income replacement rate, that's an approach where you're
looking at the income side of things, but which also
essentially what you're highlighting here is like you can also
just look at the expense side of things and calculate
how much you're going to need based on that, and.

Speaker 1 (27:13):
So let's let's be honest, if you can it's a
monocular calculate, it's going to be an easy Well, it's
simpler like that.

Speaker 2 (27:18):
That's what I really like about that too, Because you
can look at what your expenses are this year and
the ability to just multiply that by twenty five and
shoot for that amount in your retirement account.

Speaker 1 (27:27):
It's typically more accurate, it's going to be great.

Speaker 2 (27:28):
And so what you simply need to do is just
take your pension amount that your wife is going to
receive every single year, subtract that from your annual expenses,
then multiply that by twenty five, and you should pretty
dang accurately have a good number in mind as to
what it is you should be shouldn't what you should
be shooting for.

Speaker 1 (27:45):
Yeah, I guess the the other thing to factor in
is lifestyle creep and we don't mean that in a
bad way, but like, how are you going to inflate
your lifestyle over time if you are retiring early. Do
you have big ambitions in those early retirement years, You're
going to want to save up more in your investment
account for that too, Because if you're like, we're going
to hold off all travel until we hit that early
retirement age we're searching for. But once we get there, man,

(28:07):
we're probably gonna be spending like fifteen twenty grand a
year on travel. No shame in that game, but just
make sure you're prepared for it. If you're not spending
anything on travel now, but that's going to ramp up
significantly in early retirement years. That is another part of
the equation that you've got a factor in. That's right.
The other thing to note is that when you have
a pension, you can be less conservative with your investments,
and that is because your pension acts as this safe
asset class for you. Right, that could mean having more

(28:29):
stock exposure for longer. You can be less conservative with
your specific investment choices.

Speaker 2 (28:34):
Yeah, you go all in on crypto if you can. Well, honestly,
a pension from the government might be as far to
the conservative side as crypto is to the risky side,
you think, except for one less there are government shutdowns
that that takes place. But that's the question do pensions
continue to get paid out during government shutdowns? That's not
something I know at the top.

Speaker 1 (28:54):
May have you me either, but yeah, what we're really
highlighting here is that you can have more a higher
stock allocation than a whole lot of people because similar
to as the bonds, similar teachers, like we talked about
with Dan Otter back not a few weeks ago, Matt
and he was basically saying, yeah, because of this pension
that teachers have access to, they don't have to be

(29:16):
as thoughtful in terms of their acid allocation. They can
just have more of a stock heavy approach because they
have that pension in their back pocket. The same is
true for Mike and for his family, and we typically
want people to invest at least fifteen percent of what
they make. That's what we suggest Mike. We'd say, while
you might find that you can invest a smaller amount,
you might not want to diplow that point either though.

(29:38):
If you're living a great life at your current savings rate,
and you find that you can save less without cramping
your lifestyle, without missing out on things that matter to you,
you can keep things the same, and it just means
you're gonna have more optionality sooner. So that's the other
thing when we're talking about flexibility, Matt, it's like, well, yeah,
I could cut down on how much I'm investing now,
but if it's not going to meaningfully improve my life,

(29:59):
why don't I keep investing? And guess what, at some
point down the road, I'm gonna have more flexibility, more
options to choose what it is I want to do
and whether I want to rent my left lifestyle up
in a bigger way that's going to make me happier five, six, eight, ten,
twelve years down the road.

Speaker 2 (30:12):
That's true, Yeah, I will say, And that's good advice,
and that's what we typically say because most Americans are
not saving enough for their retirement by far. I would
say that the majority of our listeners they I wouldn't
assume that a lot of our listeners are on a
pretty dang good path. They're like, they're on a good
trajectory when it comes to their retirement savings, and it's
certainly got bigger goals, but they're probably doing a lot already,
I think so.

Speaker 1 (30:33):
I would think so.

Speaker 2 (30:33):
And so Mike, I guess the reason I bring this
up is because you mentioned your daughter within your question, right,
and so keep just keep in mind that the time
that it takes to be a parent right now, it
takes a lot of your time, is basically what I'm
getting at, Like the next couple of years are not
going to look like the last two years that your
daughter is living with you there at your house. Like
once they're in their teenage years, it requires a whole

(30:55):
lot less of your time. And parent after parent that
I talk to they mentioned this. They talk about how
like they're their own person, they're interested in teenage things.
And what that means typically is like honestly, more free
time for you, more free time and more of an
ability to continue to work, maybe to launch. Like imagine
once you're an empty nester in fifteen years, maybe even
ten years, you are going to have more of an
ability to take risks, to work longer, to launch a business.

(31:18):
And I don't want you to, I guess over sacrifice
in the here and now, because you're trying to hit
that fifteen percent fifteen plus percent, like you are in
that stage.

Speaker 1 (31:28):
Of Russia with the pension backup. Yeah, yes, exactly.

Speaker 2 (31:31):
Like we talked to the money guy. We talked with
Brian about the messy middle like you are in this
stage of life where everything is being asked of you,
more time than ever is being asked of you, more money.
You are hemorrhaging like at all the different seams, whether
it's like things that you and your wife want to do,
whether it's things for the kids. And I think it
can be really difficult to save that much money in

(31:51):
these years right now, and I think it's okay to
with that in mind, to not beat yourself up. I
guess over the fact that maybe you're not quite hitting
that mark, knowing that you be able to ramp things
up further down the road.

Speaker 1 (32:01):
And that's what was so great. If you have been
dedicated to saving and investing pretty heavily in those early
years and then you hit the messy middle years and
you feel like you can dial it back in terms
of how many hours you're working, in terms of how
much money you're saving and investing, and then guess what,
ten years down down the road, when your kids are
off partying with their friends or whatever, you know, and
they don't want to hang out with you as much,

(32:23):
then maybe you're like, I think I'm going to ramp
up my work activities again, and I am going to
ramp up my investing game a little bit too. That
flexibility matters so much, and getting started early before you
have kids is such a help. And feeling less pressure.
I think in those years, Matt, when you feel like
the time the time crunch is real. That's where we're
at right now with munch of young kids and we
have cut back our work schedule a little bit. I

(32:44):
could totally see ramping that up down the road with
that kind of like an empty nester and there are
fewer domains being made of me, like on the home front.
You're gonna be on CNBC like five days a week. Please.

Speaker 2 (32:55):
What I want to point out here is the fact
that that optionality that Joel, that you're talking about, it
might be to a lot of folks in granted this
is a note for the parents out there specifically, but
like that optionality to potentially work less. It doesn't have
to be twenty thirty years in the future. It could
be like a few years from now for a shorter
window of time before you choose to say, hey, now

(33:15):
I have the ability to ram things up again. And
I think, because I don't know, I'm putting myself in
that situation. I can picture myself doing that, Mike.

Speaker 1 (33:22):
I don't know. That might be a situation you find
yourself in as well. One of our super good buddies
just adopted a baby, and I love it for their
family so excited, and he was like, are you gonna
what are you gonna do? You're gonna take some leaf
family leave time? He said, no, I just work part
time and I'm gonna keep working part time. I love
what I do. Yeah, and so this it's the perfect
balance already.

Speaker 2 (33:41):
He has found the sweet spot. And that sweet spot's
gonna vary from person to person. But Mike, we hope
that you are able to find that for you and
for your family. Joel, let's get to our next listener question.
This one has to do with some of the finer
points of contributing to multiple retirement accounts.

Speaker 4 (33:57):
Hi, Matt, and Joel, I have a question about Rock one. Okay,
I have a TSP retirement plan through my company, and
since this is a WROTH from a company, does that
mean the amount I contribute for both the traditional and
ROTH accounts. It's part of the limited twenty three thousand
dollars contribution for twenty twenty four or is the Roth
contribution a part of the seven thousand elemit? Thank you

(34:19):
love the podcast, Matt.

Speaker 1 (34:21):
This is a really good question, and I think part
of the me is it's a good question is because
there's a lot of confusion over contribution limits, and there
is we're talking abou alphabet soup when we're talking about
retirement accounts so much of the time, And if you've
been listening to Hot of Money for like two or
three years, you might be thinking, well, I got this
stuff figured out by now. But there are a lot
of people out there, Matt, and understandably so it can

(34:43):
be confusing. How much can I contribute to this account?
What does that account even mean? And who has access
to the account? Can I open up one of those accounts?
And I wish it was simpler. It's not terribly simple.
So I guess it allows us to continue having jobs,
which is the best part of that. But yeah, especially
when one of these accounts has at least shares the

(35:05):
same name as another account, the Roth Ira and the
Wroth four O one K, and then there's a traditional
four oh one K, and you're like, and then we're
throwing thrift savings plans into the mixed TSP into this question.

Speaker 2 (35:15):
That's what Oh, that's what Katie has. By the way,
she didn't mention your name at the beginning. Yep, let's
humanize this question, jol So.

Speaker 1 (35:21):
Yeah, so like so many accounts thrown into the mix,
and it can feel like a foreign language, that's right.

Speaker 2 (35:25):
Yeah, So let's talk about limits, Katie, because the answer
to this question is that you can contribute twenty three
thousand dollars to your WROTH TSP, which is the.

Speaker 1 (35:35):
Federal employee equivalent of the four one.

Speaker 2 (35:37):
K by the way, and you can also contribute seven
thousand dollars towards a WROTH IRA. And this is true
for everyone out there listening who has a workplace retirement account.
And by the way, also your your employer contribution, it
doesn't count against your personal twenty three thousand dollars max.

Speaker 1 (35:55):
So if you're getting that six or nine percent match,
you don't have the fact it's it's just your own
attribution that is out side of that. Yeah.

Speaker 2 (36:01):
So you as an individual, you essentially have thirty thousand
dollars that you can invest in tax event retirement accounts
overall in twenty twenty four.

Speaker 1 (36:09):
Yeah, I remember hearing some of these numbers thrown around
early in my investing career, Matt, when I was making
almost nothing at my radio gig, and I was like,
that's cool. Those contribution limits go that high. Who hits
that though, that's insane, Like, haha, must be nice. I
know exactly. But over time, hopefully you grow in your
income and you're able to get closer and closer to
maximumt those retirement accounts. It's easier said than done, but

(36:32):
I love that goal at least. And then that number
goes up regularly too, over the years we mentioned every year. Yeah,
it goes up with inflation. That's right. So income for
tax brackets goes up every year. Same thing with contribution limits.
They're going up most years. And the only people who
have different contribution limits than what match just outlined, by
the way, are folks who are fifty and over. They're
allowed to make catch up contributions. So, Matt, we're getting

(36:54):
closer to that. We're still a little ways off. Well,
in Katie, she didn't mention how old she is. Maybe
she's in her two, but she might be at the
other end of the spectrum, she might be closer to retirement.
Let's say she's fifty two, and she's like, I got
tons of money to toss that thirty thousand dollars, that's
not enough. I have more than that. I want to contribute. Well,
good news for you. You can put an additional one
thousand bucks into your IRA each and every year, and

(37:15):
an additional seventy five hundred into the TSP four oh
one K four or three B. She has the TSP,
but whatever account whoever's listening to this has, if they're
over that age, they can contribute even more. So that
means that folks fifteen over Matt can invest as much
as thirty eight five hundred bucks, which is incredible. Again,
one of those things that like twenty five year old

(37:36):
Joel would have been like, who's doing that? Yeah, but
there are people doing that. It's really impressive.

Speaker 2 (37:40):
I wanted to highlight something else too, so you mentioned
kind of like the alphabet soup, which can be crazy
confusing when it comes to all these different retirement accounts.
I think another potential confusing aspect of retirement accounts is
the fact that just putting your money within one of
these accounts, that's only the first step towards investing. And
actually I don't even like saying investing because you haven't
actual invested your money. If your money is just within

(38:02):
a four one k or if your money is just
within a roth ira, because you actually have to like
deploy those dollars, right, you have to like otherwise like
that money is just hanging out in your account is
they're kind of like these free radicals that are just
like floating around.

Speaker 1 (38:14):
They haven't a big car, but it hasn't turned the
ignission on. They haven't been told what to do.

Speaker 2 (38:18):
It makes me think of uh, surfing, like your money
is just hanging out on the beach, right, And there's
like this cliche of surfers, like folks who don't actually surf,
and they're just like hanging out on the beach, like
waxing down their.

Speaker 1 (38:29):
Board, talking about big ways that they've actually caught.

Speaker 2 (38:31):
Which did you watch any surfing during the Olympics a
little bit? Yeah, it's like a newer event. But money
that you haven't actually invested in any accounts are like
those surfers where they're just kind of like hanging out.
They're not really doing anything. You actually have to get wet,
you gotta take you gotta take some risks. Because yes,
there's a chance you'll get like totally wiped out, but
you're never gonna have any fun. Like there's a zero

(38:52):
chance of seeing your money grow at all unless it's
actually invested, if you're not actually out in the ocean.

Speaker 1 (38:58):
So in this analogy, is the wet suit the emergency fund?

Speaker 2 (39:02):
No, no, no, because you don't invest any money that
is your emergency.

Speaker 1 (39:05):
That's completely separate, So you're keeping that on the beach.

Speaker 4 (39:07):
Yeah.

Speaker 2 (39:07):
Yeah, that's the other person who's hanging out in the car,
like completely safe away from any wave, away from any threat.

Speaker 1 (39:14):
Gotcha. The last thing I think is worth mentioning here
to Katie is just massive props for prioritizing Wroth accounts,
the Wroth version of the IRA and of the TSP.
Oh yeah, then the traditional ones, because yes, it means
paying more in tax now, but future you is going
to be thankful for the absent tax bill in those
retirement years. That we recently talked in depth about roths

(39:34):
with Ed Slott, who's like is America's IRA experts, right,
he provided a lot of good information, but I think
one of the things he did I was you and
I were already pro roth and now I feel more
rapidly pro ROTH thanks to that talk with Ed, So
I think ultimately it's going to be helpful to most people.
The people love to see that little tax break now,
but when you listen to that interview with Ed, you
might rethink your desire for traditional accounts and that little

(39:58):
bit of tax break now in favor of massive future
tax savings.

Speaker 2 (40:01):
That's right, Was that just confirmation bias? Like we're hearing
from somebody who also believes in what we believe, which
is most likely going to be higher tax rates off
in the.

Speaker 1 (40:09):
Future, and it's been doing it in a long time.
He knows what he's talking about, and so I appreciated
his in depth perspective. I think it's anybody who's on
the line are not sure which account they should be
investing in, traditional or WRATH, they should totally listen to
that one.

Speaker 2 (40:21):
All right, man, we've got more to get to. We're
gonna hear from a listener who has a question about
house hacking, something that we feel like it's been a
minute since we've talked about house hacking.

Speaker 1 (40:28):
But we'll get to that right after the break. Matt,
Let's keep rolling. Let's get to our Facebook question. Of
the week this one. We got an email this week
from a listener wanted to remain anonymous, which is understandable,
but had a question about house hacking. I'll read it here.

(40:48):
She says, I'm a twenty nine year old woman buying
a duplex with plans to live in one side and
rent out the other. By the way, Matt, this is
a strategy we would highly recommend to a lot of people.
Love it, so we're all for it already, she said. Recently,
I started worrying about a scenario where the only renters
I could find were men who were flirty or disrespectful.
I was concerned that if I denied a man housing
based on this behavior, rather than his credit score or references,

(41:11):
I might risk litigation under the Fair Housing Act. To
my pleasant surprise, I discovered the Missus Murphy exemption, which
states that an owner occupied property with four units or
fewer can deny a tenant on any criteria they choose.
To my immediate dismay, I learned that the Missus Murphy
exemption may not apply to homes with an FAHA mortgage.

(41:32):
I found that my mortgage details have an addendum that
explicitly states I must comply with the non discrimination provisions
of the Fair Housing Act. My question is it worth
considering refinancing in the future to reduce the risk of
this scenario. I would love to hear any insights you
have on what good reasons there are to refinance and
how to avoid litigation as a landlord. This is all
new to me. I don't know any landlords.

Speaker 2 (41:53):
Yeah, okay, I guess I think it's worth taking a
step back and just talking about house acting generally speaking.
Maybe it's worth defining it because folks might be thinking, okay, well,
like do you have to get a duplex to house hack?
And we've dedicated entire episodes to house hacking, which can
be as simple as having an apartment even and just
reunning out one of the rooms of the apartment that
counts as house hacking. It can be that it can

(42:14):
be running your place out on Airbnb, or it can
be something that takes a little more investment, like this
listener is looking to do right like renting out or
purchasing a duplex and running out half of it, getting.

Speaker 1 (42:24):
A triplex a quad plex. And we have talked about
what a financial game changer it can be to house
hack like, oh my gosh, it's huge, Because it's huge massive.
You reduced your housing costs that can provide extra income,
and so you're like, it's.

Speaker 2 (42:35):
The biggest line, single line item on your entire budget,
like every single month is housing. So any way that
you can significantly reduce that is going to make a
massive difference. And we've talked before about the small wins
that you get from being able to cut your hair
or change your oil hat. This is something that is man,
you are reaping massive dividends every single month.

Speaker 1 (42:51):
It's nice to hit the really big items on your
budget to dramatically reduce the outflow on those, and then
you don't have to cut your own hair. Yeah, or
you can do both and then just bank even more.
Mind Yeah.

Speaker 2 (43:01):
But like when I think back on my financial life,
I don't have many like financial regrets. I guess I
feel like everything that I look back on and I'm like,
h now, that was a misstep.

Speaker 1 (43:11):
I was still able to learn.

Speaker 2 (43:12):
But man, I totally wish I did not know about
house hacking prior to purchasing a home, and I wish
that I would have considered that. Actually I take that back.
I didn't know about it but it wasn't. It just
wasn't something Kate and I were at all considering. And
especially when you're younger, you're thinking in your twenties, even
in your thirties, if you're looking at your first place,
you're thinking, oh, this, this house has got to be perfect, right,

(43:34):
I'm gonna be here forever. But the average American moves
every five years. The chances are pretty slim that you're
going to be in that house way off into the future.
So what that means it doesn't have to be perfect.
It can be a great place, maybe one that doesn't
check all the boxes, but hey, you're actually able to
better yourself financially every single month. I think that's something

(43:54):
that I wish that Kate and I would have considered
early on when we.

Speaker 1 (43:58):
Before we buy our But it also doesn't have to
be permanent, right Like I think of when we bought
a duplex. At one point, Matt that we saw the
potential in making that a single family home, but we said,
we don't really have the cash nor the desire to
take on the debt to turn this home into the
home of our dreams yet. But what if we ran
out the back for a few years before we give

(44:18):
it a go, have extra kids in space that needs
to be filled, and that was like incredibly helpful. We
were able to bank so much of that cash that
we were getting from running out the back part of
that duplex ultimately turn it into a killer single family
home down the road. So yeah, we were able to
do that for multiple years. It is a financial game changer,
and we will link to some of our episodes on
house hacking. But if you are willing to do something

(44:41):
that presents a little more discomfort in the here and now,
you can have a lot more financial comfort down the
road because of it. And Matt, I gotta be honest too,
I didn't know much about the Missus Murphy exemption until recently,
and I think this is so great. It makes so
much sense, especially for young ladies like this listener. Like,
I was just talking to a single female friend Matt,
who is trying to date online and it sounds utterly

(45:02):
absurd these days. I'm so glad you and I met
our spouses before the age of online dating really took hold.
I can't imagine what it's like to date right now.
Feel for all the single folks out there. Yeah, and
I know this list, or she's not trying to date anyone.
She's trying to do the opposite. I think, at least
when it's a keeper distance, so she's at least trying
to create solid barriers between tenant and person she might

(45:22):
go on a date with. But I totally get why
a female would want to try and protect themselves, especially
when you know we're talking about running out half of
a duplex and that's where the Missus Murphy exemption covers
those people really beautifully.

Speaker 2 (45:34):
Yeah, and so we did some digging on this, and
we didn't find anything that states that you wouldn't qualify
for the miss Murphy exemption if you have an FHA mortgage.
With that in mind, I wouldn't necessarily worry about refinancing
for this reason. Maybe there might be other reasons that
you might want to refinance in the future, but not
necessarily for this. Something else too, is I want to,

(45:55):
I guess, ameliorate some of your concerns about this actually happening.
I don't know what the exact numbers might be giving
your situation, but HUD so the housing and urban development
everyone's heard of HUD, but they've got some numbers and
figures and of the millions and millions of different rentals
that are out there, I think they've received something like
thirty three thousand different complaints. And that might sound like

(46:18):
a whole lot of complaints, right, but when you actually
do the math, what that comes out to is a
point zero eight percent complaint rate.

Speaker 1 (46:25):
And that's just complaints, right, that's assuming that. I think.

Speaker 2 (46:29):
Let's be honest, I think there are a lot of
complaints unfortunately that get voiced where there isn't a whole
lot that's done essentially.

Speaker 1 (46:35):
Yeah, or maybe they're against maybe serial abusers from like
let's say it's one of the Wall Street firms right
that continues, or some frustrated people, or.

Speaker 2 (46:44):
Or somebody that's just being like straight up racist, right, Like,
I've got to think that the folks who are voicing
their concerns are I mean, they either feel like full
on threatened or they feel that they've been just treated
in an incredibly unfair way. It does not sound like
that that's what you are planning to do. You are
trying to protect yourself and so it's you do keep
some of those protected classes in mind. But I think
the likelihood of this happening to you as a landlord

(47:06):
they're at your duplexes is highly unlikely.

Speaker 1 (47:08):
Yeah, exactly, And I wouldn't want to spend the thousands
and thousands of dollars that it would take to refinance, unless,
of course, you were also locking in a much lower rate,
and breaks have ticked down recently, so that might be
the case totally, But you don't want to spend those
thousands of dollars just to feel like you're perfectly covered.
These are one of those like shark bite scenarios, Matt,
where my kids worry about getting attacked by a shark.
But the truth is they're more likely to get I think,

(47:29):
killed by a vending machine, and we're not worried about that,
So why are we worried about the other? This is
something I wouldn't worry too much about. The other really
important thing to mention here real quick, too, is that
in your listing you have to abide by the FHA guidelines.
Even though you have protection from being forced to rent
to let's say a man, as a woman living on
that property, you're not allowed to state no man allowed

(47:52):
in the listing, so you don't have the rent to
the man who comes up to take a look at
the property, but you also can't write anything that's against
those guidelines in the listing when you put it on
Zillow or or wherever it is that you're listing that unit.
That's right. Yeah.

Speaker 2 (48:05):
I think the last thing I would say to this listener, though,
is to I don't know, maybe look on the bright
side of things. Like Joel, you and I we have
both been landlords for I don't know years at this point,
We've got multiple properties, and folks always talk about all
the things that could potentially go wrong, whether it's the
you know, the plumbing toilet call in the middle of
the night, or like a tree falling on you know,
someone's car or something like that. But these things rarely happen.

(48:27):
Have you ever gotten a call in the middle of
the night.

Speaker 1 (48:29):
I literally have never gotten now, and I've had a
call annoying issues to deal with of course exactly, and
got to maintain these properties days where I'm like, why
am I a landlord again? And then I have to realize,
wait a second, it's been really good to me. But yeah,
you're right, like it's overblown, and there's a lot of blown. Yes,
there's a lot of like landlord fear being I think,
especially from people in the traditional investment community, it's like,

(48:50):
why would I want to go through that that massive
pain of being a landlord. And the truth is it
can be worth the reward. Like we talked about in
the beginning with just how great house hacking can be
as an investment and as a wealth generator, the juice
can be worth the squeeze. And realize that there's some
squeeze involved, but it's usually not as difficult as so
many people make it out to be. And it's also

(49:10):
important to mention, Matt, this is the best advice you
and I can offer as landlords and as people who
know a lot about this stuff. We're also not lawyers
speaking from personal experience. Yeah, take that into consideration too.
Let's move on, Matt. Let's get back to the beer
that we had on this episode. This one is called
Champion Ground. It's a coffee stout from Jackie O's. What
were your thoughts on this beer, my friend that this
is a big old stout, it's got those and you

(49:33):
know what, I think that led to us enjoying the
heck out of it, because this is the kind of
beer where if I were to have like, well, how
big is this bottle.

Speaker 2 (49:40):
This is over twelve ounces, right, so this is twelve
point seven. If you were to have enjoyed this beer
by yourself, by the end of it, you're just like,
oh my gosh, too much overwhelming, right, but enjoying a
nice chill six ounces of this beer so good.

Speaker 1 (49:53):
It was perfect.

Speaker 2 (49:54):
It almost felt like, I don't know, enjoying a nice
little port at the end of a fancy meal, like
a little dessert type of wine.

Speaker 1 (50:00):
But it had incredibly robust coffee flavors going on.

Speaker 2 (50:04):
So they partnered with a local coffee roaster there and
they had those flavors. It's got that nice barrel age
depth that you get with a style as well. Pretty
much any beer out there, I think you can probably
age in oak or whatever barrels they happen to stumble
upon and make it taste better. So there's just I
don't know, I freaking love barrel aged beers.

Speaker 1 (50:23):
Barrel it makes it so much better. Stouts in particular
are barrel stouts and barrel aged sours. YEP.

Speaker 2 (50:28):
As I was saying that, I was like, have we
had a barrel aged IPA before? I'm not sure if
we have.

Speaker 1 (50:32):
I think maybe once or Yeah, those don't lend themselves
to barrel not nearly as much. This was delicious. It
had vanilla and coffee vibes with a little bit chocolate
thrown into and super chocolatest. It was sweeter than I
thought it was going to be, not quite as roasty
as I thought it was going to be. But I
think that sweetness comes from the vanilla and the barrels,
and I think Jackieo's make some of the best stouts

(50:52):
out there.

Speaker 2 (50:53):
So you still liked it. I still love the sweetness. Yeah,
you're not a huge fan.

Speaker 1 (50:57):
Nice to have a stout again because we haven't had
a stout in a while.

Speaker 2 (50:59):
So even though it's not to have these bigger right
stout beers during the summer when it's hot, it.

Speaker 1 (51:04):
Makes more sense in December and January. But still lovely
to have one, and lovely to have this one. All right,
that's gonna do it for this episode, Matt. Listeners can
find more information about some of the things we've talked
about on the show notes up on our website at
howtomoney dot com, and they can also sign up for
our newsletter at how to money dot com. Slash Newsletter
that's right, So that's gonna be it until next time.

(51:25):
Best friends out, best friends out,